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Hello out there stock charting fans. I see that all the stock markets in the world gave Allen Greenspan
thumbs down on the small interest rate cut by the Fed.’s on Tuesday. This is not unusual as the Fed.’s always
start with a quarter point cut.
I had noted in my last letter about the oscillators being extremely over bought. Many traders saw the rate cut
as a good time to sell into strength and take some pro ts. I also told you about the NASDAQ trying to go
above and close above the 50 day and the 200 day and not being able to due so. Today the NASDAQ closed
below the 21 day moving average as well as the Russell 2000. This means more downside action as long as
this is so.
It looks like the big board stocks and the Dow with the Transports may going back to re-test the old lows set
a few weeks ago. Many people are waiting for this to happen and this could be very supportive for the market
when it does.
I mentioned two months ago that the 9 months cycle bottoms were due October 16. But please don’t tell
YHOO about this.
I did take note of how the volume was drying up on the Internet stocks today and most were only down 1 to
2 points at most. In fact, the base patterns are still looking good and just waiting for earnings due out in two
weeks. This should propel these stock into new highs.
Remember to keep your stops very tight in this market. Watch you trend lines and never chase a stock. Keep a
close watch on ELNK, MSPG, MFNX, VISX is set to break out tomorrow. Buy point is at this price and keep your
stops tight.
Yes I’m still holding YHOO and AMZN.
Have more for you soon. Dan

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